A Look at the Big Picture: SPY Monthly Chart

About once every month or two I like to pull up the monthly chart of SPY with a MACD indicator attached to the chart. This helps me keep things in perspective and the MACD on the monthly chart does a good job of alerting you to potential changes in trend. Here's the chart:You can see on the above chart that the MACD never got above zero with this past year's rally...and now the distance between the signal line and the moving average is converging. These things are a very bearish indication to me but the market could go up.

The MACD is great for putting current price action in proper context but it does not tell you where price action is heading. This bearish looking MACD could turn very bullish if the market rallies for the next week or two. That being said, it still appears that the path of least resistance is down and that's the direction that I will continue to put money to work.

Have a great weekend.

TLT